Question 1

Price will rise to eliminate a shortage.

Accepted Answer

A) True 
 B)False

Question 2

If a person expects the price of socks to increase next month,then that person's current demand for socks will increase.

Accepted Answer

A) True 
 B)False

Question 3

In markets,prices move toward equilibrium because of

Accepted Answer

A)  the actions of buyers and sellers. 
B)  government regulations placed on market participants. 
C)  increased competition among sellers. 
D)  buyers' ability to affect market outcomes. 
A)  the actions of buyers and sellers. 
B)  government regulations placed on market participants. 
C)  increased competition among sellers. 
D)  buyers' ability to affect market outcomes.

Question 4

If something happens to alter the quantity demanded at any given price,then the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 5

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure.We could expect the current demand for

Accepted Answer

A)  hair gel to increase. 
B)  razors to increase. 
C)  combs to increase. 
D)  shampoo to increase. 
A)  hair gel to increase. 
B)  razors to increase. 
C)  combs to increase. 
D)  shampoo to increase.

Question 6

Today's demand curve for gasoline could shift in response to

Accepted Answer

A)  a change in today's price of gasoline. 
B)  a change in the expected future price of gasoline. 
C)  a change in the number of sellers of gasoline. 
D)  All of the above are correct. 
A)  a change in today's price of gasoline. 
B)  a change in the expected future price of gasoline. 
C)  a change in the number of sellers of gasoline. 
D)  All of the above are correct.

Question 7

If a study by medical researchers found that brown sugar caused weight loss while white sugar caused weight gain,then we likely would see

Accepted Answer

A)  an increase in demand for brown sugar and a decrease in demand for white sugar. 
B)  a decrease in demand for brown sugar and an increase in demand for white sugar. 
C)  an increase in demand for both brown sugar and white sugar. 
D)  no change in demand for either type of sugar because weight loss is not a determinant of demand. 
A)  an increase in demand for brown sugar and a decrease in demand for white sugar. 
B)  a decrease in demand for brown sugar and an increase in demand for white sugar. 
C)  an increase in demand for both brown sugar and white sugar. 
D)  no change in demand for either type of sugar because weight loss is not a determinant of demand.

Question 8

In a competitive market,the quantity of a product produced and the price of the product are determined by

Accepted Answer

A)  buyers. 
B)  sellers. 
C)  both buyers and sellers. 
D)  None of the above is correct. 
A)  buyers. 
B)  sellers. 
C)  both buyers and sellers. 
D)  None of the above is correct.

Question 9

Assume Tibana buys computers in a competitive market.It follows that

Accepted Answer

A)  Tibana has a limited number of sellers to turn to when she buys a computer. 
B)  Tibana will find herself negotiating with sellers whenever she buys a computer. 
C)  if Tibana buys a large number of computers,the price of computers will rise noticeably. 
D)  None of the above is correct. 
A)  Tibana has a limited number of sellers to turn to when she buys a computer. 
B)  Tibana will find herself negotiating with sellers whenever she buys a computer. 
C)  if Tibana buys a large number of computers,the price of computers will rise noticeably. 
D)  None of the above is correct.

Question 10

Which of these statements best represents the law of demand?

Accepted Answer

A)  When buyers' tastes for a good increase,they purchase more of the good. 
B)  When income levels increase,buyers purchase more of most goods. 
C)  When the price of a good decreases,buyers purchase more of the good. 
D)  When buyers' demands for a good increase,the price of the good increases. 
A)  When buyers' tastes for a good increase,they purchase more of the good. 
B)  When income levels increase,buyers purchase more of most goods. 
C)  When the price of a good decreases,buyers purchase more of the good. 
D)  When buyers' demands for a good increase,the price of the good increases.

Question 11

Surpluses drive price up while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 12

If the demand for a product decreases,then we would expect

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease. 
B)  equilibrium price to decrease and equilibrium quantity to increase. 
C)  equilibrium price and equilibrium quantity to both increase. 
D)  equilibrium price and equilibrium quantity to both decrease. 
A)  equilibrium price to increase and equilibrium quantity to decrease. 
B)  equilibrium price to decrease and equilibrium quantity to increase. 
C)  equilibrium price and equilibrium quantity to both increase. 
D)  equilibrium price and equilibrium quantity to both decrease.

Question 13

Figure 4-14
Panel (a)Panel (b)     Panel (c)Panel (d)    
-Refer to Figure 4-14.Which of the four panels illustrates an increase in quantity supplied?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 14

Which of the following does not affect an individual's demand curve?

Accepted Answer

A)  expectations 
B)  income 
C)  prices of related goods 
D)  the number of buyers 
A)  expectations 
B)  income 
C)  prices of related goods 
D)  the number of buyers

Question 15

When a surplus exists in a market,sellers

Accepted Answer

A)  raise price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated. 
B)  raise price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated. 
C)  lower price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated. 
D)  lower price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated. 
A)  raise price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated. 
B)  raise price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated. 
C)  lower price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated. 
D)  lower price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated.

Question 16

Which of the following is not a determinant of demand?

Accepted Answer

A)  the price of a resource that is used to produce the good 
B)  the price of a complementary good 
C)  the price of the good next month 
D)  the price of a substitute good 
A)  the price of a resource that is used to produce the good 
B)  the price of a complementary good 
C)  the price of the good next month 
D)  the price of a substitute good

Question 17

If a good is inferior,then an increase in income will result in

Accepted Answer

A)  an increase in the demand for the good. 
B)  a decrease in the demand for the good. 
C)  a movement down and to the right along the demand curve for the good. 
D)  a movement up and to the left along the demand curve for the good. 
A)  an increase in the demand for the good. 
B)  a decrease in the demand for the good. 
C)  a movement down and to the right along the demand curve for the good. 
D)  a movement up and to the left along the demand curve for the good.

Question 18

When quantity demanded decreases at every possible price,we know that the demand curve has

Accepted Answer

A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted;rather,we have moved along the demand curve to a new point on the same curve. 
D)  not shifted;rather,the demand curve has become flatter. 
A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted;rather,we have moved along the demand curve to a new point on the same curve. 
D)  not shifted;rather,the demand curve has become flatter.

Question 19

An early frost in the vineyards of Napa Valley would cause

Accepted Answer

A)  an increase in the demand for wine,increasing price. 
B)  an increase in the supply of wine,decreasing price. 
C)  a decrease in the demand for wine,decreasing price. 
D)  a decrease in the supply of wine,increasing price. 
A)  an increase in the demand for wine,increasing price. 
B)  an increase in the supply of wine,decreasing price. 
C)  a decrease in the demand for wine,decreasing price. 
D)  a decrease in the supply of wine,increasing price.

Question 20

A decrease in demand is represented by

Accepted Answer

A)  a movement downward and to the right along a demand curve. 
B)  a movement upward and to the left along a demand curve. 
C)  a rightward shift of a demand curve. 
D)  a leftward shift of a demand curve. 
A)  a movement downward and to the right along a demand curve. 
B)  a movement upward and to the left along a demand curve. 
C)  a rightward shift of a demand curve. 
D)  a leftward shift of a demand curve.

Exam 4: The Market Forces of Supply and Demand

Price will rise to eliminate a shortage.

If a person expects the price of socks to increase next month,then that person's current demand for socks will increase.

In markets,prices move toward equilibrium because of

If something happens to alter the quantity demanded at any given price,then the demand curve shifts.

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure.We could expect the current demand for

Today's demand curve for gasoline could shift in response to

If a study by medical researchers found that brown sugar caused weight loss while white sugar caused weight gain,then we likely would see

In a competitive market,the quantity of a product produced and the price of the product are determined by

Assume Tibana buys computers in a competitive market.It follows that

Which of these statements best represents the law of demand?

Surpluses drive price up while shortages drive price down.

If the demand for a product decreases,then we would expect

Figure 4-14 Panel (a)Panel (b) Panel (c)Panel (d) -Refer to Figure 4-14.Which of the four panels illustrates an increase in quantity supplied?

Which of the following does not affect an individual's demand curve?

When a surplus exists in a market,sellers

Which of the following is not a determinant of demand?

If a good is inferior,then an increase in income will result in

When quantity demanded decreases at every possible price,we know that the demand curve has

An early frost in the vineyards of Napa Valley would cause

A decrease in demand is represented by

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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